What is the significance of "market value" in free agency?

Market value plays a critical role in free agency as it reflects the economic principle of supply and demand within professional sports. When a player's performance, potential, and desirability increases, so does their market value, which consequently affects the salary they can command in negotiations. This influence drives competition among teams to secure the best talent available, ultimately leading to higher salaries for those players who meet or exceed expectations.

In a free agency scenario, market value is essential because it distinguishes a player's worth from the team's initial offer or budget constraints. Teams must assess the market value when making offers, as players will often look for contracts that align with what others of similar skill and experience are earning. This dynamic creates a competitive landscape where players seek to maximize their earnings in accordance with their market value, making it a key factor influencing salaries and contracts.